The Indian Contract Act, 1872
Under The Indian Contract Act, 1872, which governs contracts in India, there are several types of contracts that are recognized.
Some important types of contracts:
1. Valid Contracts:
A valid contract is an agreement that fulfills all the essential elements required by law to be enforceable. It must have competent parties, free consent, lawful consideration, a lawful object, and be in the form prescribed, if any. Such contracts are legally binding on all parties involved.
2. Void Contracts:
A void contract, as per the Indian Contract Act, is a contract that is considered invalid from the beginning and has no legal effect. It is devoid of any legal enforceability, and the parties are not obligated to perform their respective promises. Examples include contracts to commit an illegal act or contracts with a minor.
3. Voidable Contracts:
Voidable contracts are initially valid and enforceable, but one or more parties have the option to void or cancel the contract due to certain legal reasons. These reasons may include fraud, misrepresentation, coercion, undue influence, or a mistake. The party with the right to void can choose to either enforce or terminate the contract.
4. Unenforceable Contracts:
Unenforceable contracts are those that cannot be enforced in a court of law due to some technical or procedural reasons. While they may have all the essential elements required for a valid contract, they lack some legal formalities, such as being in writing, registered, or properly stamped, as required by law.
5. Illegal Contracts:
Illegal contracts are those agreements that involve an unlawful object or consideration or are contrary to public policy. Such contracts are void ab initio (from the beginning) and have no legal validity. Examples include contracts for illegal activities, contracts restraining trade, or contracts promoting fraud.
6. Contingent Contracts:
A contingent contract is one in which the performance of the contract depends upon the occurrence or non-occurrence of a specific event in the future. If the specified event does not occur, the contract becomes void. These contracts are commonly used in situations where uncertainties exist.
7. Quasi-Contracts:
Quasi-contracts are not actual contracts, but legal obligations imposed by law to prevent unjust enrichment. They are based on principles of equity and are imposed by the court to avoid the unjust enrichment of one party at the expense of another. Quasi-contracts are not the result of an agreement between the parties but are created by law to prevent unfairness.